Gécamines releases report in response to allegations

Gécamines has published a response to several NGOs regarding allegations made towards the company and the DRC.

The report is titled: “Truth about the lies of NGOs in the Democratic Republic of the Congo – or how under cover of morality, one would like to deprive the country from its sovereignty over its raw materials”.

By publishing the report online Gécamines is informing national and international public opinion on the reality of facts.

The document is divided into three parts:

An answer – documented by evidence – to the most serious charges:

The alleged absence of transparency of its finances

Hundreds of millions of USD which would allegedly have disappeared from its accounts during financial years 2011-2014

The so-called non-declared revenues derived from recent transactions with new or existing partners

Allegedly under-valued asset sales

Its effective contribution to the State’s budget

Its effective contribution to debt reduction, salaries and investments.

Answers provided point that:

Gécamines’ financial statements are not only audited on an annual basis by international external auditors, but are also transmitted to the EITI, as evidenced by the copy of exchanges produced, which reports are publicly available.

All sums allegedly absent from Gécamines’ account for financial years 2011-2014 can be traced in its accounts, dollar by dollar. Gécamines produces, in the report, elements and explanations allowing for the relevant sums to be traced back.

Concerning the ERG, CNMC and TFM transactions, the amounts received by Gécamines during the 2016 financial year appear in the 2016 EITI report and the amounts received during the 2017 financial year will certainly appear in the next available EITI report.

The assets have been transferred at their market value, as valued by internationally recognized investment banks. Gécamines is producing the figures and methods used, far from unrealistic (and most importantly undocumented) figures put forward in the press.

During the period 2009-2014, Gécamines paid USD 372 million to the State, far from the USD 75 million put forward. These amounts are recorded in Gécamines’ financial statements and detailed in the report.

Gécamines effectively contributes to the debt reduction of the company, to the payment of salaries and to investments. The report produces precise figures on this topic, far from rumors and fantasies conveyed. Regarding the salaries, Gécamines once again wants to remind that it is the only company of the State’s portfolio that has implemented a social retirement plan (2015-2017), which allowed 2,294 agents to leave the company with their final account being paid.

In fact, Gécamines explains how, on the good advice of “partners of the development”, the company that was a flagship of the African mining industry has been plundered, its main assets and deposits having been transferred to foreign mining groups.

It is how more than 33 million of tons of copper have been transferred to foreign partners, leaving Gécamines with only 400.000 tons.

The report abundantly explains how the system implemented by multinational companies of the sector aims at depriving the entity and the DRC from the benefits of its projects, by under-evaluating the results of the project companies in the DRC, while these multinationals are at the same time announcing record profits on financial markets.

In total, the loss of revenue for the organisation and the DRC amounts, as of today, based on the projections provided at the time by these same international partners, to USD 4.9 billion between 2005 and 2016. Given the challenges at stake, the audits conducted by Gécamines must proceed.

An explanation – illustrated by figures and graphics – of the reasons why money derived from mines is not benefitting more widely to Gécamines and the DRC

In fact, Gécamines explains how, on the good advice of “partners of the development”, the company that was a flagship of the African mining industry has been plundered, its main assets and deposits having been transferred to foreign mining groups. It is how more than 33 million of tons of copper have been transferred to foreign partners, leaving Gécamines with only 400.000 tons.

The report abundantly explains how the system implemented by multinational companies of the sector aims at depriving Gécamines and the DRC from the benefits of its projects, by under-evaluating the results of the project companies in the DRC, while these multinationals are at the same time announcing record profits on financial markets. In total, the loss of revenue for Gécamines and the DRC amounts, as of today, based on the projections provided at the time by these same international partners, to USD 4.9 billion between 2005 and 2016. Given the challenges at stake, the audits conducted by Gécamines must proceed.

A demonstration – based on concrete examples – of the methods used by these same institutions to manipulate public opinion

It is how the relevant NGOs take offence of Gécamines’ exercise of its contractual rights on the occasion of large lucrative change of control transactions between foreign mining groups, without having taken into account national interests, while these battles have systematically allowed to assert the rights of the DRC and of Gécamines, achieving very satisfactory results such as the TFM and Glencore matters, unanimously welcomed.

Gécamines does not intend to remain silent in front of allegations patently designed to serve the same interests that, around the world, are not welcoming these developing countries that made the legitimate choice to regain their natural resources and impose a better sharing of the revenues between the investors and the host countries, which are only calling for an increase of their own resources to conduct their development policy and reduce their dependency on conditional foreign aid.

This debate evidently goes beyond the specific situation of Gécamines and of the DRC.

It is the first challenge posed to all mining countries of the African continent that can no longer glorify themselves and continue to beg for international assistance while the recovery and the correct use of only a part of the richness derived from their subsoil would radically change things.